Tuesday, November 29, 2011

The Chiquita move: facts you won't hear from the press. UPDATED

You're going to hear about this in the news today, especially if you live in the Cincinnati area. Chiquita is moving its headquarters out of Cincinnati to Charlotte, NC.

CINCINNATI -- It appears a fight to keep Chiquita in Cincinnati has ended.

Sources close to the negotiations tell News 5's John London that the company will move its headquarters to Charlotte, N.C.

The company employs about 400 people at its headquarters in downtown Cincinnati. Sources inside Chiquita said that employees were notified via email Tuesday morning and a conference call was scheduled for 11 a.m. to discuss the move.

Obviously, this is bad news for Ohio. Liberals are already giddy to blame the Kasich administration, accusing them of not acting, and some are making comparisons to when NCR left the state during Ted Strickland's tenure.

However, the facts are that the two situations are completely different.

First, the Kasich administration has been involved with the situation and engaged with them from the very beginning.

WLWT has learned that Cincinnati is pulling out all the stops in an effort to keep Chiquita from leaving town.

State and city leaders characterize the package presented to Chiquita as "very aggressive" as the Fortune 500 company mulls a move out of the Queen City.

It comes in response to a report in the Charlotte Observer, which said Tuesday that $4 million in incentives have been offered to Chiquita to move to North Carolina.

Note that the original offer was reported to be $4 million in incentives, back in September. But the amount being reported today is $22 million. That certainly leads one to believe that the state and the city were very engaged and really did pull out all of the stops, and that North Carolina responded by substantially increasing its offer.

How involved was the state with NCR, when they left Ohio? According to the New York Times, NCR CEO Bill Nuti sat next to Governor Strickland at a conference in New York. Unbelievably, despite the fact that there were already rumors swirling about NCR, Strickland didn't even know who he was.

Mr. Nuti said that he attended a renewable energy conference in New York the month after that disastrous meeting, and during lunch sat next to Governor Strickland — who, he says, not only did not know who he was, despite his name tag, but never introduced himself.

Months later, the state finally cobbled together a last-minute offer that still fell short of the one from Georgia. A spokesperson for Strickland said that "he would have been happy to talk to Mr. Nuti about NCR’s plans if he had been approached." Governor Kasich doesn't wait for companies to come to him, or ignore their CEOs.

Another fact to consider, is that Chiquita's issues go far beyond incentives, and the main issue is one that Kasich recognized early. The issue is the area's airport.

Some analysts said the biggest problem facing Cincinnati in its battle to keep Chiquita is the Cincinnati/Northern Kentucky International Airport and its lack of international flights.

Gov. John Kasich spoke directly to that issue three weeks after taking office. He described some companies as being antsy.

"They just tell me, we can't get international flights. We're probably going to have to leave," Kasich said. "You know, I think it's become a global marketplace. You better get this airport fixed. I'll help you."

The airport issue may seal the deal for Cincinnati with its inability to effectively compete in flights to Latin and South America.

Here's something else that I haven't seen widely mentioned yet. The Nielsen Company is set to move 500 jobs into Cincinnati. In fact, they're moving them into the Chiquita Building!

Nielsen has told its roughly 500 Covington employees that they will relocate to downtown Cincinnati’s Chiquita Center by Jan. 1. A Nielsen employee, who requested anonymity, said employees were told this week that the global market research company will occupy floors nine through 12 at the 29-story office tower at 250 E. Fifth St. Nielsen officials declined comment.

Ohio Gov. John Kasich’s aggressive new attitude on creating jobs earned its first big win in Southwest Ohio on Monday, as pharmacy giant Omnicare announced it’s moving its headquarters and nearly 500 jobs to downtown Cincinnati.

So, while we went down swinging with Chiquita, in just the last couple of months Cincinnati has seen more than an offset to that loss with other new jobs being brought to the city.

One thing is becoming clear. This administration has put building relationships with job creators at #1 on its priority list. They are out there fighting to bring new jobs to the state. We won't win every battle. But unlike before, we will now be involved and in the fight every single time. We've still got a long way to go to get us out of the hole Barack Obama and Ted Strickland left us in. So far at this early state, the good news has significantly outweighed the bad.

UPDATE: GOHP Blog makes a great point that I missed. There comes a point, when you are working with an employer, that incentive packages get too big. At that point, the investment in that employer ceases to be a good deal for taxpayers.

For those interested in the math [regarding Chiquita's package from NC], that’s almost $60,000 of incentives per job, which is A LOT, bordering on near irresponsibly use of taxpayer dollars.

In the case of Chiquita, the cost didn’t justify the payout. The Kasich administration has made a commitment to bringing jobs to Ohio on an ROI-positive model—return on investment—during the first year. That means if the company seeking the incentive can’t deliver more than what they received in less than 12 months, well, they don’t qualify.

It’s responsible governing: making the most out of every dollar.

As a recent example, the deal with Republic Steel has been estimated to pay for itself in one year. That's a good investment of taxpayer dollars. At some point, you have to say no, and put those development dollars to work somewhere more effective.

Besides, the real key reason for Chiquita’s departure wasn’t tax breaks. Chiquita needed our community to be a more international place -- more flights to the places around the world where they need to do business and a more diverse and multi-lingual workforce to help them interact from here with their associates around the globe.

Chiquita officials -- along with their counterparts in other key area firms -- have been expressing dissatisfaction about the decline in available flights at the Cincinnati/Northern Kentucky International Airport in recent years, stressing their need to get their executives quickly to Europe and particularly Latin America, where Chiquita grows bananas and other produce.

John Kasich has encouraged Cincinnati to get its act together on this issue, and offered to help. But he can't do all the heavy lifting for the city. Democrat Mayor Mark Mallory and the city have to get involved and address the airport situation, instead of joking about it.

If Mayor Mark Mallory was upset about Tuesday’s news that Chiquita decided to forsake Cincinnati for the warmer climes of Charlotte, N.C., he didn’t let it show.

The mayor was all smiles and jocularity as he talked to reporters during a hastily assembled news conference at The Coffee Emporium downtown.

Next, as reporters tried to pin down the mayor for his reaction to the Chiquita news, he replied: “Did I miss something? What happened?”

Yeah, that's really funny, Mayor. I hope Mallory's next opponent uses that clip to highlight his aloofness about this whole situation.

5 comments:

There's no evidence that Kasich ever met with the CEO of Chiquita. None. In fact, Nichols statement said the Administration gave up concluding that the company was hellbent in moving... something that NCR's new CEO also demonstrated, but you never saw Kasich or you give Strickland a break there.

What has Kasich done about the airport issue since taking office? Nothing. Instead he and Kvamme spent yesterday unveiling a new drivers license, something that's the purview of the BMV, not JobsOhio.

We can spend millions to move Bob Evans out of Columbus when it has no offer from any other State, but Kasich gave up on keeping Chiquita.

The difference between the two is one was under a Republican Governor, the other a Democrat, so you'll excuse the former and still blame the latter.

The jobs "gained" by Omnicare and Nieslen pay SUBSTANTIALLY less than those lost by Chiquita, so there's still a net loss to the taxbase.

Modern, what's it like to go through life so full of anger and rage? It's amazing to see you comment on everything here, and never once find anything positive. Even when the people in Toledo got jobs, you were angry.

Where is your blog of negativity? I would like to see it just one time, granted I may commit suicide after reading your angry, negative posts there.

P.S. Your boy Sherri Brown is going down, just like his wife Connie did at the Plain Dealer.

Coming up next from Bytor-The triumphant story of how Johnny "Yes, We Have No Bananas" Kasich has offered $400 million in taxpayer money (read corporate welfare) to Sears to lure them into moving their corporate headquarters from Illinois to Ohio. The same Sears that has been steadily declining for years and probably isn't long for this world.

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